Brown Coal Diesel plans for Victoria

$5bn project cost: The product could be blended with conventional diesel to help it meet emissions standards, or could be used as a direct diesel in niche locations such as cities or particularly sensitive environments. Early estimates – now being reviewed – put the cost of the project at $5 billion and some heavyweight companies are involved. Energy giants Anglo American – which acquired Monash Energy (previously known as Australian Power and Energy Ltd) in 2003-04 – and Shell are providing the investment funds. Anglo Coal, a division of Anglo American, would conduct the mining of the coal feedstock.

‘Safe’ storage in CO2 dump: A mining licence has already been granted by the Victorian Government, which has flagged strong in-principle support for the project. A crucial aspect of the project, from an environmental aspect, is the capture of carbon dioxide from the liquids production process. With gasification in the presence of oxygen rather than air, the separation of excess carbon dioxide can proceed using proven technologies. The question then arises of how the carbon dioxide can then be safely stored, and the project is looking at the process of geosequestration. "An advantage we have is proximity to the very promising geological formations of the Gippsland Basin in Bass Strait, which have stored oil and natural gas for millions of years," Hargreaves said. "Initial studies into the potential of the region for large-scale transport, injection and storage of carbon dioxide have been positive."

Further research needed: "With the help of a grant from the Commonwealth Government, the Cooperative Centre for Greenhouse Gas Technology conducted a study into geosequestration in the Gippsland Basin, and concluded that it could provide safe and secure long-term storage." he said. "Of course, further research is necessary and a thorough technical and environmental risk assessment would be necessary before injection could proceed in a given location, particularly since there are incumbent oil and gas producers in the area. The Federal Government is building a regulatory regime to ensure this assessment process is workable and sound."